Methods and systems for managing transaction card accounts enabled for use with particular categories of providers and/or goods/services

ABSTRACT

A computer-implemented method and system for managing transaction card accounts involves enabling a transaction card account by a card issuer for use with pre-defined categories of providers of goods/services and goods/services sold and issuing a transaction card and establishing an associated pre-qualified category card account. Upon receiving data for a transaction with the transaction card at a transaction terminal by a processing platform of the card issuer via a card association processing network, the category of the provider and goods/services is interrogated to determine whether or not the transaction can be posted on the pre-qualified category card account of the cardholder, and the transaction is approved and posted to the pre-qualified category card account if the transaction falls within the pre-qualified category of the cardholder.

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a continuation application of U.S. patentapplication Ser. No. 13/334,627, filed Dec. 22, 2011, entitled “METHODSAND SYSTEMS FOR MANAGING TRANSACTION CARD ACCOUNTS ENABLED FOR USE WITHPARTICULAR CATEGORIES OF PROVIDERS AND/OR GOODS/SERVICES,” which is acontinuation application of U.S. patent application Ser. No. 12/956,699,filed Nov. 30, 2010, entitled “METHODS AND SYSTEMS FOR MANAGINGTRANSACTION CARD ACCOUNTS ENABLED FOR USE WITH PARTICULAR CATEGORIES OFPROVIDERS AND/OR GOODS/SERVICES,” which is a continuation application ofU.S. patent application Ser. No. 12/289,673, filed Oct. 31, 2008,entitled “METHODS AND SYSTEMS FOR MANAGING TRANSACTION CARD ACCOUNTSENABLED FOR USE WITH PARTICULAR CATEGORIES OF PROVIDERS AND/ORGOODS/SERVICES,” which claims the benefit of U.S. ProvisionalApplication No. 60/996,134 filed Nov. 2, 2007, entitled “METHODS ANDSYSTEMS FOR MANAGING TRANSACTION CARD ACCOUNTS ENABLED FOR USE WITHPARTICULAR CATEGORIES OF PROVIDERS AND/OR GOODS/SERVICES,” all of whichare incorporated herein by reference in their entirety.

FIELD OF THE INVENTION

The present invention relates generally to the field of transactioncards, and more particularly to methods and systems for managingtransaction card accounts enabled for use with a particular category ofproviders of goods/services and/or a particular category ofgoods/services.

BACKGROUND OF THE INVENTION

Private label credit cards are credit cards that have been branded witha specific company name. However, even though the name of a privatebusiness is on the front of the card, a card-issuing financialinstitution such as a bank actually issues and processes private labelcards. Further, although they look like store-issued credit cards,private label credit cards have account numbers similar to major creditcards that include a unique sequence that identifies the credit card fora particular card association processing system, such as the MASTERCARD®card association card processing system.

Currently, certain industries are highly distributed in what can bedescribed as a dealer-based type of environment, such as the health careindustry in which there are many independent providers or the autoafter-market industry in which there are numerous independently ownedrepair shops. In such an environment, in order for a card-issuingfinancial institution, such as a bank, to offer private label lendingproducts to such providers, it is necessary for the financialinstitution to approach each one of those providers individually inorder to sign each one up through a merchant services agreement.

In the current environment, it is also necessary for the financialinstitution to arrange for a merchant acquirer or acquiring bank andprocessors to process transactions for each one of such providers. Inaddition, it is necessary for the card-issuing financial institution toperform extensive system development work to enable those independententities to produce and use private label lending products for theircustomer. Thus, it is necessary for the card issuer to have an externalsales force that goes out to each of these independent providers andsigns them up and to provide technology in their offices to enable themto acquire lending relationships and transact on those relationships.

SUMMARY OF THE INVENTION

Embodiments of the present invention provide methods and systems formanaging transaction cards accounts enabled for use with a particularcategory or class of providers of goods/services and/or a particularcategory or class of goods/services, instead of for use only withindividual providers, that leverages a card association's cardprocessing network as well as the indicia used to identify a merchant'stype or mode of business and merchandise sold that is suitable for usein an the card association's network.

Embodiments of the invention employ computer hardware and software,including, without limitation, instructions embodied in computer programcode encoded on machine readable medium for execution in a processor andmemory coupled to the processor, to provide methods and systems formanaging transaction card accounts for use with a particular category ofproviders and/or goods/services in which a card issuer looks for andqualifies and enables transaction card accounts for use with theparticular category of providers and/or a goods/services sold accordingto a category or classification scheme suitable for employment in atransaction card processing environment. The card issuer issuestransaction cards that are branded, for example, by the card issuer andestablishes associated pre-qualified category card accounts forcustomers that are limited in use to transactions with the particularpre-qualified category of provider and/or goods/services.

In embodiments of the invention, a customer swipes the customer's cardthrough a card reader of a transaction terminal, such as a POS terminal,in connection with a transaction and the transaction data is processedthrough the card association processing channels back to the card issuerin the same manner as in a major credit card transaction and withmerchant fees that do not exceed merchant fees associated withprocessing a major credit card transaction. When the transaction data isreceived by a processing platform of the card issuer, the category ofthe provider and/or goods/services is interrogated to determine whetheror not the transaction can be posted on the pre-qualified category cardaccount. If the transaction falls within the pre-qualified category ofproviders and/or goods services, the transaction is approved and postedto the pre-qualified category card account, and if not, approval of thetransaction is denied. Alternatively, if the transaction does not fallwithin the pre-qualified category of providers and/or goods services,the transaction may be posted to another of the cardholder's accountswith the card issuer based, for example, on pre-defined parameters.

This summary is provided to introduce a selection of concepts in asimplified form that are further described below in the detaileddescription. This summary is not intended to identify key features oressential features of the claimed subject matter, nor is it intended tobe used to limit the scope of the claimed subject matter.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic diagram that illustrates an overview example ofkey components and the flow of information between key components of asystem for managing transaction card accounts enabled for use with aparticular category of providers of goods/services and/or a particularcategory of goods/services for embodiments of the invention; and

FIG. 2 is a flow chart that illustrates an example of a process ofmanaging transaction card accounts enabled for use with a particularcategory of providers of goods/services and/or a particular category ofgoods/services for embodiments of the invention.

DETAILED DESCRIPTION

Reference will now be made in detail to embodiments of the invention,one or more examples of which are illustrated in the accompanyingdrawings. Each example is provided by way of explanation of theinvention, not as a limitation of the invention. It will be apparent tothose skilled in the art that various modifications and variations canbe made in the present invention without departing from the scope orspirit of the invention. For example, features illustrated or describedas part of one embodiment can be used on another embodiment to yield astill further embodiment. Thus, it is intended that the presentinvention cover such modifications and variations that come within thescope of the invention.

FIG. 1 is a schematic diagram that illustrates an overview example ofkey components and the flow of information between key components of asystem for managing transaction card accounts enabled for use with aparticular category of providers of goods/services and/or a particularcategory of goods/services for embodiments of the invention. Referringto FIG. 1, components of the system 100 for embodiments of the inventioninclude, for example, a transaction card 110 issued to a customer 120 byan issuer 130 usable in transactions via a POS terminal or similardevice (not illustrated) of a merchant 140 in a pre-qualified category.Other components include, for example, an acquirer 150 that processesthe merchant's credit card authorizations and payments and forwards thedata to the card association's processing system 160, which in turncommunicates with the card issuer 130, and a processing platform 170 ofthe card issuer 130 storing category pre-qualification data.

It is to be understood that references herein to components, such as theissuer 130, the merchant 140, the acquirer 150, the card association'sprocessing system 160, and the issuer's processing platform 170 include,without limitation, processors coupled to memory and to other processorslikewise coupled to memory via computer networks, as well as computerprogram products stored in machine readable media and executing in suchprocessors and memory.

Embodiments of the invention involve, for example, a credit card productthat leverages a card association's network, such as the MASTERCARD®network, that leverages indicia which identify to which network a cardbelongs as well as which organization issued the card 110, such as thecard association's bank identification (BIN) number ranges, and thatleverages classification schemes used to identify a merchant's type ormode of business and the merchandise sold, such as the cardassociation's merchant category code (MCC) which is very similar to thestandard industrial classification (SIC) used to specify the industry towhich a particular company belongs.

Rather than enabling an individual location, embodiments of theinvention propose to enable an entire market. Thus, instead ofqualifying each individual provider location separately, embodiments ofthe invention look, for example, for MCC codes. For example, thecard-issuing financial institution 130 looks for the MCC code associatedwith family practitioners (or some other category of goods/services) andqualifies the category associated with that particular MCC code insteadof attempting to qualify each individual family practitioner locationseparately. It is to be understood that use of the MCC code is intendedas an illustrative example only and that embodiments of the inventionutilize any classification or categorization of providers ofgoods/services and/or types of goods/services sold that is suitable foremployment in a transaction card processing environment.

From the perspective of the merchant 140, the private label card 110works and functions exactly the same way as a major credit card bearingthe name and logo of one of the major card associations, such asMASTERCARD®, works and the merchant 140 is charged the same merchantfees as if they were processing a major credit card transaction.However, from the perspective of the card-issuing financial institution130, the card 110 is usable and available only in certain locations, forexample, in the particular MCC code category that was qualified by thecard issuer 130. Thus, if the qualified category is familypractitioners, the card 110 cannot be used in a different category, suchas a convenience store or grocery store category.

Embodiments of the invention employ a transaction card 110, such as aplastic credit card, that is branded, for example, by the card-issuingfinancial institution 130 and limited in use to transactions with aparticular category of provider of goods/services and/or for aparticular category of goods/services. The card 110 for embodiments ofthe invention is preferably branded by the card issuer 130 with its ownbrand but can also, or instead of, be branded with any other suitablenon-major credit card brand or brands. This aspect of embodiments of theinvention requires the card issuer 130 to market the card to suchproviders to assure that they understand that the card is acceptable foruse in transactions with their businesses at a cost to them that is nogreater than the cost of transactions with any major credit card.

It is also to be understood that use of the example of qualification ofthe family practitioner category of providers is illustrative only andthat embodiments of the invention include all possible categories ofproviders of goods/services, including without limitation autoafter-market businesses, child care providers, the travel industry, homeentertainment businesses, education related goods/services, to name onlya few. Preferably, there are no geographic limitations to use of thecard 110 for embodiments of the invention. For example, the card 110 forembodiments of the invention can be used in transactions with anybusiness that falls within the particular category of providers ofgoods/services, regardless of its location.

FIG. 2 is a flow chart that illustrates an example of a process ofmanaging transaction card accounts enabled for use with a particularcategory of providers of goods/services and/or a particular category ofgoods/services for embodiments of the invention. The method is organizedas a sequence of modules or steps in the flow chart. However, it is tobe understood that these and modules associated with other methodsdescribed herein may be rendered for parallel execution or intodifferent sequences of modules.

Referring to FIG. 2, at S1, the card issuer 130 looks for and qualifiesand enables transaction card accounts for use with a particular categoryof providers of goods/services, such as merchant 140, and/or aparticular category of goods/services sold according to a category orclassification scheme that is suitable for employment in a transactioncard processing environment. At S2, the card issuer 130 issuestransaction cards, such as transaction card 110, to customers, such ascustomer 120, that are branded, for example, by the card issuer 130 andestablishes associated pre-qualified category card accounts forcustomers, such as customer 120, that are limited in use to transactionswith the particular pre-qualified category of provider ofgoods/services, such as merchant 140, and or category of goods/services.

Referring further to FIG. 2, at S3, the customer 120 swipes thecustomer's card 110 through a card reader of a transaction terminal,such as a POS terminal, of the merchant 140 in connection with atransaction, and the transaction data is processed through the cardassociation processing channels 160 back to the card issuer 130 in thesame manner as in a major credit card transaction and with merchant feesthat do not exceed merchant fees associated with processing a majorcredit card transaction. At S4, when the transaction data is received bya processing platform 170 of the card issuer 130, the category of theprovider and/or goods/services is interrogated to determine whether ornot the transaction can be posted on the pre-qualified category cardaccount.

Referring again to FIG. 2, at S5, if the transaction falls within thepre-qualified category of providers and/or goods/services, thetransaction is approved and posted to the pre-qualified category cardaccount, and if not, approval of the transaction is denied.Alternatively, at S6, if the transaction does not fall within thepre-qualified category of providers and/or goods/services, thetransaction may be posted to another of the accounts of the cardholder120 with the card issuer 130 based, for example, on pre-definedparameters.

In an alternate aspect of embodiments of the invention, the transactioncard 110 is branded or co-branded with a card association brand, buttransactions falling within the pre-qualified category of providers ofgoods/services and/or a category of goods services are posted to thecardholder's qualified private label account, while all othertransactions with the card 110 are posted to a regular card associationbranded account of the cardholder 120 with the card issuer 130. Thus, inthe alternative aspect, the card 110 for embodiments of the inventionfunctions as a private label card, for example, in transactions withcertain businesses or for certain goods/services, while functioning as amajor credit card everywhere else.

The alternative aspect of embodiments of the invention providescardholders a value proposition associated with the card in a number ofways. For example, the cardholder 120 is able to bucket his or herspending in a particular industry, such as health care. In the healthcare example, the private label account for the pre-qualified categoryof providers of health care services, such as merchant 140, may havefavorable payment terms, such as deferred payment options (e.g., 18months-same-as-cash) or extended term payment options, for example, forelective medical procedures or unexpected procedures that are notcovered by insurance. At the same time, the major credit card accountassociated with the same card 110 can have any number of associatedrewards programs, such as cash back, rewards points, etc.

The foregoing specification provides a description with reference tospecific exemplary embodiments. It will be evident that variousmodifications may be made thereto without departing from the broaderspirit and scope as set forth in the following claims. The specificationand drawings are, accordingly, to be regarded in an illustrative senserather than a restrictive sense.

What is claimed is:
 1. A computer-implemented method, the methodcomprising: receiving, by a computer of a card issuer from apoint-of-sale terminal of a merchant, transaction data associated with atransaction from a transaction card of a cardholder, wherein thetransaction data comprises an identification of a category of a productassociated with the transaction; receiving, by the computer of the cardissuer from the point-of-sale terminal of the merchant, the transactiondata through a card association network for the transaction card, thetransaction data comprising the identification of the category of theproduct; comparing, by the computer of the card issuer, theidentification of the category of the product to a pre-qualifiedcategory of products associated with the transaction card of thecardholder; transmitting, from the computer of the card issuer to thepoint-of-sale terminal of the merchant, approval of the transaction as ahealth care transaction when the product is categorized in apre-qualified health care category, and approving, by the card issuer,the transaction as the health care transaction; and transmitting, fromthe computer of the card issuer to the point-of-sale terminal of themerchant, approval of the transaction as a general transaction when theproduct is not categorized in a pre-qualified health care category, andapproving, by the card issuer, the transaction request as the generaltransaction.
 2. The computer-implemented method according to claim 1,wherein the transaction card is branded by the card issuer.
 3. Thecomputer-implemented method according to claim 1, wherein an accountassociated with the transaction card is pre-qualified for transactionsassociated with a location.
 4. The computer-implemented method accordingto claim 3, wherein approving the transaction further comprisesdetermining whether the location for the merchant identified in thetransaction data is the same location that is pre-qualified for theaccount.
 5. The computer-implemented method according to claim 1,further comprising posting, by the computer of the card issuer, paymentto a second account of the cardholder if the transaction is denied. 6.The computer-implemented method according to claim 5, wherein the secondaccount is a card association branded account of the cardholder.
 7. Thecomputer-implemented method according to claim 3, wherein the locationis a geographic location.
 8. The computer-implemented method accordingto claim 1, wherein the transaction card is a private label card.
 9. Thecomputer-implemented method according to claim 1, wherein thetransaction data further comprises a code to identify a location of themerchant.
 10. The computer-implemented method according to claim 9,wherein identifying the location of the merchant further comprisesidentifying the code in the transaction data.
 11. A computer-implementedmethod, the method comprising: receiving, by a computer of a card issuerfrom a point-of-sale terminal of a merchant, transaction data associatedwith a transaction from a transaction card of a cardholder, wherein thetransaction data comprises an identification of a category of a service;receiving, by the computer of the card issuer from the point-of-saleterminal of the merchant, the transaction data through a cardassociation network for the transaction card, the transaction datacomprising the identification of the category of the service; comparing,by the computer of the card issuer, the identification of the categoryof the service to a pre-qualified category of services associated withthe transaction card of the cardholder; transmitting, from the computerof the card issuer to the point-of-sale terminal of the merchant,approval of the transaction as a health care transaction when theservice is categorized in a pre-qualified health care category andapproving, by the card issuer, the transaction as the health caretransaction; and transmitting, from the computer of the card issuer tothe point-of-sale terminal of the merchant, approval of the transactionas a general transaction when the service is not categorized in apre-qualified health care category, and approving, by the card issuer,the transaction as the general transaction.
 12. The computer-implementedmethod according to claim 11, wherein the transaction card is branded bythe card issuer.
 13. The computer-implemented method according to claim11, wherein an account associated with the transaction card ispre-qualified for transactions associated with a location.
 14. Thecomputer-implemented method according to claim 13, wherein approving thetransaction further comprises determining, by the computer of the cardissuer, whether a location for the merchant indicated in the transactiondata is the same location that is pre-qualified for the account.
 15. Thecomputer-implemented method according to claim 11, further comprisingposting, by the computer of the card issuer, payment to a second accountof the cardholder if the transaction is denied.
 16. Thecomputer-implemented method according to claim 15, wherein the secondaccount is a card association branded account of the cardholder.
 17. Thecomputer-implemented method according to claim 13, wherein the locationis a geographic location.
 18. The computer-implemented method accordingto claim 11, wherein the transaction card is a private label card. 19.The computer-implemented method according to claim 11, wherein thetransaction data further comprises a code to identify a location of themerchant.
 20. The computer-implemented method according to claim 19,wherein identifying the location of the merchant further comprisesidentifying the code in the transaction data.